What’s Going on With Non-Competes These Days?

Non-compete agreements – contracts that restrict an employee’s ability to compete with their employers during and for a specified period of time after they leave – have been in and out of the news feed over the last few years. At the federal level, government agencies have made attempts to ban them completely. At least for now, however, those efforts have all failed. Meanwhile, some states are taking steps to strengthen restrictions on non-competes and in a few cases to ban them completely. What’s the latest on these developments? We will walk through the history and discuss where things stand today in this article.  

Failed Federal Ban Efforts

Two federal agencies took aim at non-compete agreements over the last several years of the Biden administration, but neither has traction at the moment. The Federal Trade Commission (FTC) attempted a sweeping ban, issuing a Final Rule on April 23, 2024 that would have banned non-competes nationwide, both prohibiting employers and workers from entering into new agreements and rendering existing agreements unenforceable. Stated goals behind the Rule were suspension of unfair methods of competition in or affecting commerce while promoting greater labor mobility, higher earnings among workers, increased innovation, and new business formation.

The Rule, however, was short-lived. In the latter part of 2024, two federal courts – one in Texas and one in Florida – issued injunctions blocking the Rule. Under the Trump Administration, the likelihood of the Rule’s revival is low, and the FTC signaled its intent to pause its pursuit of these proceedings when, on March 7, 2025, it filed identical motions requesting a 120-day stay of its appeals of both injunctions.

The National Labor Relations Board had also taken aim at non-competes. In 2023, its then-General Counsel (a Biden appointee) issued a memo to NLRB leaders expressing her view that non-competes violate the National Labor Relations Act, and in October 2024, she suggested that employees subjected to unlawful non-competes should be entitled to “make whole relief” – in other words, to recover damages from their employers who asked them to sign those agreements. President Trump, however, dismissed that GC from her duties not long after taking office, so those initiatives likely terminated with her departure.

New Federal Joint Task Force

While the sweeping prohibition efforts of recent years appear to be in long-term hiatus, the FTC has taken other actions that suggest it isn’t completely abandoning worker mobility efforts. On February 26, 2025, the FTC announced its plans to launch a Joint Labor Task Force that will be responsible for investigating and prosecuting what it deems deceptive, unfair, and anti-competitive labor market conduct, citing non-competes, no-poach, non-solicitation, and no-hire agreements as examples of such conduct. The manner and extent to which the FTC’s oversight will limit employers from entering into and enforcing non-compete agreements thus remains to be seen, as the agency has indicated that it will continue to bring individual enforcement actions on a case-by-case basis as it deems appropriate.

State-Level Restrictions

While no federal ban is on the immediate horizon, a number of states have taken steps to curtail or terminate completely the use of non-compete agreements as to workers in those states. For example, at least nine states plus the District of Columbia have enacted laws placing minimum salary thresholds, so that non-competes may be enforced against only those who earn in excess of that threshold amount. Approximately twenty states have placed limits on the use of non-competes as to health care professionals. Other states have enacted laws that place other types of restrictions on how and when non-competes may be used, and we expect those efforts to continue.

Georgia’s Non-Compete Law Mostly Unaffected

While change is in the air across the nation, the Georgia Restrictive Covenants Act, which became effective in 2011, continues to be interpreted and explained in Georgia’s courts but otherwise remains generally unaffected by the attacks on non-competes that we have seen at the federal level and in other states. Under that law, non-competes are permissible as to certain types of employees (relatively broadly defined) so long as they are reasonable as to duration (generally up to two years), geographic scope, and scope of activity protected. Additionally, other types of restrictions that fall short of completely prohibiting an employee from post-employment competition, such as provisions prohibiting solicitation of customers/clients and employees and the disclosure/use of confidential information remain viable. In any case, it is always critical to ensure that any such restrictions are carefully drafted to meet the requirements of the law and afford the best chance at their enforceability in court.

Next Steps for Employers

As the tides continue to turn locally and nationwide, employers are advised to review and assess their drafted agreements to ensure compliance with applicable state laws. Employers are further advised to consider how to best protect their business interests by deciding which employees should be subject to non-compete agreements, take precautions necessary to protect trade secrets and other confidential information, establish policies to effectively onboard and offboard employees, and fortify non-solicitation and non-disclosure provisions in any applicable agreements.

Employers are encouraged to consult counsel for advice on how to effectively draft non-compete agreements and whether non-competes or some other form of restrictive covenant might be warranted to protect the company’s business interests. Feel free to contact us if you would like to discuss the current state of the law governing restrictive-covenant agreements and how these recent developments might impact your business.